It is important to note that the laws governing debt collection in the United States varies from state to state. Therefore, there could be 50 different sets of statutes and procedures governing the process, so the purpose of the information provided here is to provide overarching concepts and themes that are applied in multiple states. The author is based in Florida, so the focus of many of these answers will also have more specific information based on Florida law and procedure.
In the United States, there is no minimum amount required to begin the debt collection process, but the amount of the debt may determine where the collection case is filed—whether it is filed in state or federal court. Because debt collection stems from contractual or business relationships, those relationships would be governed by state law. There would be no independent basis to commence an action in federal court based on a federal statute, but if there is diversity as to the citizenship of the parties, then a collection action could be filed in state court, if the debt to be collected meets the jurisdictional threshold amount of $75,000. This action, however, would be governed by state rules. There are federal statutes, however, that can aid in obtaining discovery from parties that may be helpful in debt collection proceedings, and these will be discussed later. However, for purposes of these responses, unless noted otherwise, it will be assumed that most collection actions will be filed in state court.
State courts in the United States do not have threshold minimum amount, and thus, they can be used to collect debts of any amount. State courts generally provide for a small claims court where people can do their own legal work without an attorney. There are also generally two other “higher” court levels where an enforcement action may be brought, depending on the amount of the claim, as these courts have threshold monetary jurisdictional limits. The purpose of small claims courts is to try to make it affordable to collect a debt. Having to hire an attorney to proceed in either county or circuit court (the higher levels mentioned above) could be cost-prohibitive in terms of the decision to attempt to enforce or collect the debt.
Also, it is important to note that, absent a contractual or statutory provision that allows for the prevailing party to receive its reasonable attorneys’ fees, generally a party cannot recoup the attorneys’ fees it incurs as part of the debt collection process. Therefore, a cost-benefit analysis should be undertaken by a party prior to embarking on any debt collection process. This analysis should be done in conjunction with an analysis of the solvency of the debtor, to the extent possible.